A Startling Franchise Industry Statistic
by Ed Teixeira
During the process of gathering some franchise industry data I discovered an
interesting statistic. Read more to learn out what I found.
In a recent article, I wrote about a
specific franchise industry data available to the general public or
industry. As a follow up to that piece I decided to take an in-depth look at a
related category of information that has intrigued me for a number of years.
Although Iíve just started to do some work on this subject I thought that Iíd
provide a preview. I welcome comments and information anyone would like to
After reviewing approximately 1,400 franchise listings in The Franchise Handbook
I found that 1 in 6 or 256 listed franchises had 5 franchisees or less. The
Franchise Handbook receives regular franchisor updates from their emails,
advertising solicitations and their update listings twice a year. However, not
everyone responds so the number is a close approximation. Within this category
there are a number of franchisors that started franchising over 10 years ago.
A number of these franchisors may have a flawed franchise and shouldnít have
launched a franchise program. Did some consultant convince them otherwise?
However, itís my opinion that there are a number of interesting and attractive
franchise concepts that fail to grow because of other reasons including:
- A lack of working capital necessary to fund new franchise
- The franchisor may not have the required business, franchise
or leadership skills needed to successfully launch and sustain a
- A franchisor may simply decide to rein in their franchise
program and focus on their corporate location(s).
- Personal reasons
My next step will be to identify why so many franchisors failed to develop
their program, which will be a daunting challenge.
© 2011 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at email@example.com